Bhutan Law In-Sights — Issue III

DNP Facilitating the Auction of a Private Building — Some Legal Empowerments You would Receive

Kuensel report dated 3 February 2017 by Tshering Palden and Tashi Dema titled “Finance Ministry to order DNP to auction private property” is quite interesting. The report quoted a senior attorney as saying “[…] a state agency has never been ordered by a court to fulfill an individual creditor’s interest of recovery.”

The issue here is noticeable: “who execute the law?”

Refer the Civil and Criminal Procedure (CCPC) of 2001, and you see Section 2.1 which says “The Executive shall have a duty to provide for the execution of judgments of all the Courts.” Refer Article 1(13) of the Constitution of the Kingdom of Bhutan 2008, which specifically provides that “There shall be separation of the Executive, the Legislature and the Judiciary and no encroachment of each other’s powers is permissible except to the extent provided for by this Constitution.” There is a separation of powers — that the legislative make the law, judiciary interpret the law, and executive execute the law. So, we all understand that executive execute the law, not the judiciary.

With due respects to the intelligent of the senior attorney who said that “a state agency has never been ordered by a court to fulfill an individual creditor’s interest of recovery,” I think this view is total incorrect. State agencies were involved in many occasions in many civil law suits (and would involve in future as well). Where the Judgment debtors are not being able to pay the judgment debt or the financial penalty awarded by a Court, the latter would order the executive branch (the Police under the Ministry of Home and Cultural Affairs) to detain the judgment debtor until the money have been duly recovered. The court also order the judgment debtor for civil imprisonment calculating the amount of money s/he owes with the minimum national wage rate. I have also seen the National Land Commission executing the judicial order to ratify the land related issues and discrepancies. I have also seen Thimphu Thromde demolishing the houses and constructions under the judicial order. These executive agencies execute the judicial order (the law), and in fact, judiciary has been issuing orders to fulfill an individual interests, be it recovery or the other.

With regard to the present case scenario, I must confess that the case of such nature involving the sale of private building might be the first of its kind in the history of our times. The question is who is responsible to auction the private building?

Before answering the above question, let me educate the readers on the concept of enforcement. When does the typical issue of “enforcement” arise in the judicial workplace? Enforcement is used where the judgment debtor has failed to pay the judgment debt or failed to pay any installment due under it. Thus, the court will always give the judgement debtor an option to pay the money or initiate the sale of property of its own. However, if the judgment debtor fails to do so within a stipulated period of time, the judgment creditor will put an application to the court asking for enforcement. In such situation, the judgment creditor will invoke the principle of judicial sale which is incorporated under Chapter 14 of the CCPC. To define thus, a judicial sale is a method plaintiffs use to enforce a judgment. The court will then ultimately issue a writ of execution to the executive. The question is again to which executive branch of the government will the court make such writ of execution? This would also answer our first question “who is responsible to auction the private building?” Chapter 14 of the CCPC, though do not provide exhaustive procedure, however it envisages procedural requirements for the judicial sale. But the provisions fails to provide how and to whom the writ of execution is to be made.

In the United States, a court would typically order a marshal under the Department of Justice. The Department of Justice is the executive branch of the government. Their procedural law is clear as to whom to serve the writ of execution. In the United Kingdom, it is called warrant of execution and their procedural practices are well established.

In our jurisdiction, does the Police Act extend its mandate for civil law enforcement? The answer is partially yes. In the civil contempt for example, a court would order for imprisonment which the police would comply the order accordingly. In monetary recovery cases, a judgment debtor will be ordered to serve the sentencing equivalent to the amount of money s/he has to pay. But when it comes to judicial sale of property like private building or private car, the laws are silent. Does the National Housing Development Corporation (NHDCL) mandate to enforce the judgment because they look for housing? In case of judicial sale of private car (for instance), will the Royal Safety and Transport Authority (RSTA) assume the mandate to enforce the judgment because it looks for motor vehicle safety? I am not sure.

The Court, in the present case, ordered the Department of National Property (DNP). If I were a Judge, I would have done the same. Because when there is no specific executive office, or where there is no forum, it is not judiciary’s problem but the executive’s. The executive should mandate certain office(s) to auction the private properties, by law or by an executive order.

The attorney also said “[…] but in Sonam Phuntsho and Tandin Bidha’s case, the Movable and Immoveable Property Act takes care of it.” This he says, in reference to the writ the Supreme Court has issued based on the Constitutional powers. I am not sure which provisions of the Movable and Immovable Property Act s/he refers to; but as far as I am concern, there is no single provision which empowers the court to issue a writ of execution. The CCPC is vague as well. In other jurisdiction, as mentioned above, civil procedure lays down a clear procedural provision to issue a writ of civil execution, but in our procedural law, this is not the case. However, I support his or her views to the point that this would bring a bad precedence. An enforcement order can be issued even by the lower courts, and the lower courts do not enjoy high privileges to invoke the Constitutional provisions like the Honorable High Court and the Supreme Court. Assuming that it would bring complexity in the future, the Honorable Supreme Court should have drawn its power to issue a writ of execution from the provisions of judicial sale or Section 2.1 of the CCPC.

What I failed to understand is this part of the Kuensel report: “A lawyer said that while this is the first case where a government organisation will be involved in settling a private property dispute, the ministry complying with the SC’s order without it first being discussed in Parliament will be construed as a crime.” I am not sure what the report basically intent to tell the readers, but from my legal glance, it’s difficult to understand how and why will it be construed as a crime. May be I will have to read and analyze over and over again.

Kuensel also writes that “[…] it has been learnt that the usual practice courts follow to settle such property disputes is by constituting a committee and asking banks to auction the property if it is mortgaged to any bank. The committee members also attend the auction.” This is true. In the case of involvement of a bank, the Movable and Immovable Property Act empowers the mortgagee to foreclose the property thus mortgaged, and then the due process follows accordingly. However, the court does not give guideline as to how to initiate the sale or auction the properties, and therefore I presume that the establishment of a committee might be the bank’s initiative or their internal arrangements done through procedural guidelines. Again, the issue is complete different in the present case. There is no bank involvement, even if we presume that the building is mortgaged, the mortgagee is not the judgement creditor in this case, and thus, the sale through bank is not an idle way of doing when it is not involved in any manner whatsoever.

Whatever the issue might be, I think its time for us to think for the future. Today, we talk about the sale of private building, tomorrow we might talk about the sale of private car, private furniture, household utensils, personal electronic devices, and so on and so forth. We need certain procedural guidelines which will mandate certain institutions to carry out the work of a judicial enforcement. Perhaps, the establishment of a forum to facilitate the sale of private properties could be an appropriate move. Certainly, we cannot think to establish the like of Department of Justice, but we obviously need to have a forum that can be instituted from time to time. In this way, there will be no headlines of private properties being auctioned by the public agency in the future.